The Portal Zone

It was the first successful portal: the one place where consumers could launch Web searches, read news, check the weather, make travel plans, find local businesses. Countless companies jumped into the fray, aiming their sites at any number of niches, including businesses big and small.

The word "portal" means different things to different people. It's an overused, inexact term that is now used more as a marketing tool than anything else. Some portals follow the traditional model of giving users a launching pad or doorway to get to the tools and information they want. Others call themselves portals, but don't send the user anywhere. Many sites now (wisely) shun the word "portal" altogether, opting for monikers like "destination site" or "business center" in an effort to distinguish themselves from the competition or sound like something new.

Instead of just offering content, many sites now serve as marketplaces for both goods and services. Increasingly, they try to hook users with Web-based applications. All promise to be the end-all-be-all for both well-established businesses and those just starting up. They market themselves as the best place on the Web for businesses to create a Web site, buy software and office equipment, tally accounting figures, launch direct-mail campaigns, find business partners, and hock their wares. But they can't all be the best, can they?

Thankfully, a business doesn't have to pick just one -- or patronize a portal at all. You have the luxury of picking and choosing among them. The problem is to know where to start. Direct comparisons are difficult, unless you want to shell out lots of cash. So haven't attempted to define, rank, or otherwise quantify these sites. Instead, we created a kind of traveller's companion for the confusing, confounding portal zone.

Whatever you call them, there sure are a lot out there. Besides innumerable anonymous start-ups dedicated solely to cracking the enormous small-business market, several software vendors and banks have also set up portals as a way of serving their business customers. Many of these players have familiar names: Microsoft, Winstar, Dow Jones, Citibank, and the U.S. Chamber of Commerce.

Almost any company can throw up a portal site and call themselves a major player in the biggest untapped market now known: small business. In many ways, these companies are chasing after a goal impossible to attain. No two businesses are exactly alike.

"For these sites to say they are going after the 'small business market' is like someone saying they are going after the 'consumer market,'" says Melissa Shore of Jupiter Communications. "It's almost impossible to aggregate a set of tools that will be attractive to a restaurant in the South, a business in a metropolitan area like Chicago, and a small or home office with only 10 employees."

WHAT'S IN IT FOR THEM?Before logging on to these sites and signing up for services, small business owners need to decide what level of service they are expecting, the kind of image they want to present to partners and clients, and if there is another alternative that might better suit their needs.

All these sites will tell you that they care about your business, that they understand small businesses, and that they want to help you. That may be true. But most of all they want your money. Don't part with it easily.

For instance, common sense should tell you that just because a company with which you are familiar is "suggesting" a certain payroll package, it isn't necessarily the best one out there. It may be the one that offered the best commission rate to the referring site. Marketplaces and applications can be very useful for small businesses, but one of the main reasons many sites-formerly-known-as-portals have recently added them is that they found they couldn't make money from selling banner ads alone.

Make sure you know how these sites do plan to make money. For instance, some sites run marketplaces that simply put different buyers, sellers, and service providers in touch with one another and then take a cut of any sales that occur. Others set up what looks like an open marketplace, but it really just puts you in touch with a preordained set of suppliers that are paying the site for the referral privileges.

Banks and technology vendors use such sites as an enticement to keep current customers. "These companies, whether they are ISPs, banks, or office-supply stores, lose a lot of money due to customer turnover," says Cahners In-Stat's Kenko Burney. "It is really costly to acquire new customers, and in today's economy there is no loyalty -- customers are constantly out there looking for a better price, a better package. But if somebody is using your service for invoicing, they will be much less likely to stray for a couple of cents here and there. By adding these services they can better hold on to the customer."Assess how serious they seem to be about serving you well, and decide if their relationship with you is as important to you as it to them.

Figuring all of this out takes some work. We've tried to get you started by taking a close look at the two main kinds of portals currently out there: marketplaces and management centers. A third type of site, which we call the combo platter, tries to be both at once. Take a look and decide for yourself if these service sites are really what they're cracked up to be. Use common sense. Try out their free offerings, but don't shell out for anything until you're sure it's the right decision.

"Many of these sites are great at helping users find information, people, and better prices," Shore says, "but unless they can really help the user manage her business, they aren't really going to be helpful."

Businesses first used the Web for information gathering, and buying was the next big thing on the horizon. It's not surprising then that portals evolved from conglomerations of content, into communities, and then into commerce centers. Also not surprising: The commerce sites directed at small businesses are too numerous to count. The challenge for the sites is to distinguish themselves from the competition, to offer services that keep customers coming back rather than trawling for better prices, and to strike the best partnership deals that will extend their reach and give them the best commissions.

The challenge for the consumer is to stay on top of pricing. Often a new consumer may see one price sheet, and a more established customer may see another. If you think you are getting a good deal on paper, for example, keep an eye on that price and make sure that it doesn't go up after several months, and isn't being offered for a lower price somewhere else. Also, keep an eye out for loss leaders. The supplier may offer a low price on one or several products that most businesses purchase every week, so that when they compare invoices it may look like you save. But meanwhile you're taking a bath on something else purchased less frequently, like toner cartridges for the laser printer and copier machine.

These days, a small business may be both a buyer and a seller on these sites. Just as content sites became communities, commerce-oriented portals have evolved from simple sales sites to genuine two-way marketplaces. This was due in part to the success of online auction houses like eBay, but it is also a natural extension of the global community and marketplace created by the World Wide Web.

The small gourmet-food shop in town might like to extend its reach beyond the city limits, but it may not feel it has the money, time, or technical expertise to create and market its very own independent Web site. Using the services of one of these commerce sites offers an easy and less risky opportunity than going it alone. The other benefit is that quite often members of these sites can sign up to receive payments through services such as PayPal and BillPoint that allow the seller to accept payment via credit card or straight from the customer's checking account, without going through the hassle of getting a merchant account.

Auction sites like eBay and Yahoo! not only allow businesses to buy, but also allow them to sell goods and services, whether they are retailers and wholesalers looking for a new outlet or any business that finds itself in an overstock situation. The U.S. Chamber of Commerce will soon allow members to sell their goods and services on the Chamberbiz.com site, as well as bid on requests for service from site users. With an established auction house or a site such as the U.S. Chamber of Commerce's Chamberbiz.com, both buyer and seller are given an added measure of security -- something that should not be underestimated in the impersonal world of Internet commerce.

A better name for these sites might be "application aggregators." These are sites designed by the tech industry to sell hosted applications in bulk. These sites put together a "robust collection" of all the tools needed to run a business. Internet service providers (ISPs), banks, and software and PC manufacturers often are behind them. They aim to get your business and to hold onto it. As Cahners In-Stat's Burney points out, customers are less likely to stray in search of better pricing or service if they are tied in with other critical business operations.

That may sound cynical, but can be in the best interest of at least some businesses. For one just starting out, it may be cheaper and easier to get some mission-critical applications up and running on the Web than it would be to have them installed and troubleshot on each desktop. And for an established business that may want to try its hand at something new -- say online bill payment and presentment -- there may be no other way, and certainly no easier way, than to do it through an Internet-based service center.

Steve Rubel, an account supervisor at the 10-person public relations firm Schwartz Interactive PR, has found Yahoo! Small Business to be a godsend. As an offshoot of a bigger firm just starting off at the beginning of 2000, he and his staff were having a hard time just keeping track of when the conference room had been scheduled for appointments.

"We constantly had meetings running into each other," he says. Rubel solved the internal communication problem by posting a master schedule to the Yahoo! Small Business Center. Employees can find out which rooms are available and sign them out from their desktops as they are arranging meetings on the phone. Rubel also put his personal calendar on the site, and he can access it from his cell phone and sync it to his pocket PC. "We are a cross-platformed office with no in-house IT staff," he says. "Keeping that information on the Web is just the easiest solution all the way around."

The online calendars that Rubel and his staff use are just a single example of the many applications that these online business service centers offer. Financial applications such as time and expense tracking, invoices, billing, and payroll are among the most commonly offered and most popular being used. But just name a service, and chances are someone has put it on line.

Burney says that direct-mail marketing and public relations applications are also popular (don't tell Rubel), and she thinks that for most businesses they are a good idea. Many aggregators offer templates a business can use to create a press release that can then be distributed by mail, fax, or e-mail to a list either supplied by the business or purchased from the service.

At first glance, services like Yahoo! Small Business appear to be completely non-professional. If you choose Yahoo's free bluelight.com Internet service, be prepared to be bombarded with K-Mart banner ads. Yahoo's free e-mail service features "Do you Yahoo!?" ads at the bottom of each correspondence you send. But there are some helpful features that may otherwise be too pricey for a start-up or the smallest of small businesses. The calendars that Rubel and his colleagues use and Internet fax and voicemail services (which for a small fee can come without the cheesy ads) all can come in handy for an office full of employees who travel frequently. Rubel uses the customizable homepage feature to keep track of his clients' stock prices and any breaking news that might affect their industries.

The latest breed of portals is the "one-stop shop," where business people can buy supplies, track packages, log payments, record payroll information, send and receive e-mail, host Web sites, participate in online chats with clients, make travel arrangements, find business partners, enlist the help of consultants, and sell products. Just about everything needed for a successful business, it seems, short of a power lunch.

Still, even though you may be able to buy widgets and send press releases through the same site, there's no particular reason too. As competition heats up, however, don't be surprised if your favorite marketplace merges with a leading application aggregator. New mergers and name changes take place often. "The survivors will be the ones that find a way to offer integrated applications," says Jupiter Communications' Shore. Burney points out that many of these services don't make sense if a business doesn't have broadband access -- and most still don't. "Nobody wants to run her business with dial-up access," she says. "It will be difficult for businesses to use these sites to their full potential."

Steve Rubel isn't discouraged. "These services have a long way to go," he says, "but I see my business using them more, not less, as we grow." Onvia.com

This independently-owned and -operated portal calls itself a central trading exchange for small businesses, and that description is not far off. It started out as a more product-focused marketplace, but now works hard to distinguish itself as a site that matches a business customer with the services and partners. While it offers the small business owner easy access to Web design and hosting, accounting tools, and office supplies, it is the networking opportunities that make this site stand out.

The Request for Quote (RFQ) center allows small businesses to farm out and bid on everything from legal services to supply purchasing and event management. Buyers fill out a job description, wait for the quotes to roll in, and then pick the supplier that offers the price and services for which they are looking. Also, instead of forgetting its marketplace beginnings, Onvia is expanding them, and currently offers auctions in more than 100 categories.

As an independent business service center, Onvia has had to partner and align itself with the companies and associations that it thinks its small business customers want: Visa, AOL, and the American Business Women's Association, among others. But like all independently-run businesses, it faces the challenge of holding o to enough users to survive the inevitable fallout in this crowded marketplace. These indies must work extra hard to attract partners that business customers will trust.Bizzed.com

Bizzed is a portal from the big guys. This time it's Citibank, whose offering includes similar Web-hosting and e-mail options as other portals but comes complete with e-commerce capabilities, payroll through ADP, broadband connections through several ISPs, links to online printing centers, office products from Boise Cascade, hardware from IBM, and software from Beyond.com.

In other words, there's stuff to buy, but don't expect a whole lot of variety. You'll also see the same news and networking forums found on every other portal.

Where Bizzed stands out is in financial services (not surprising when you consider its backing). It has online banking, credit card processing and other merchant services, business credit cards, and financing for leasing -- all from Citibank. Bizzed customers also have easy access to Solomon Smith Barney 401k management and Travelers insurance, which are both members of Citibank's umbrella organization, Citigroup.

For the business most concerned with getting its financial applications on line and being able to access all accounts from anywhere at anytime, hooking up with a bank-backed portal may be a better option than either independent service providers or those backed by software or hardware manufacturers.

But you may want to pick up your notepads somewhere else.bCentral.com

Brought to you by the folks at Microsoft, bCentral is a one-stop shop for small businesses looking for Web-hosting and marketing help, as well as other services. bCentral puts the user in touch with ADP for payroll, LiveCapital for financing, and Office Depot for office supplies. There are barter services, online training centers, document templates, and package-tracking tools. It also offers business-to-business auctions and online travel arrangements.

One unique feature is the Industry Specific Buyers Guide. At present there are a host of "vertical" portals that target businesses only in a specific industry, and there are horizontal portals that offer tools and services that would be of use to businesses across the board. Microsoft's bCentral acquired VerticalNet to insulate itself from the danger of being just another horizontal portal. Now, a bread maker using bCentral doesn't have to go elsewhere to find food coloring, guar gum, or even an ingredient database. Small businesses in any of about 60 categories can log on.

The fact that bCentral's funded by Microsoft speaks of its stability, as well as its ability to acquire services and woo partners as its customers demand them. But a clear goal is to gain new customers for tools such as Microsoft Money and to offer services that compliment existing Microsoft tools. Is that a negative? Only if you are already loyal to other brands or are looking for complete objectivity.

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